COMMENTARY: A FAIRER WAY TO FIX THE STATE BUDGET

Rochester, N.Y.--  Ove Overmyer, CSEA Local 828 VP and Unit President for the City of Rochester Library Workers 7420, was recently featured in a guest commentary for City Newspaper in the February 1 edition.

GUEST COMMENTARY: A fairer way to fix the state budget

By Ove Overmyer

Ove Overmyer in D.C., Oct. 2010
(photo:  Bess Watts)

The latest attack on public-sector employees has been vicious and unrelenting. In New York, Governor Cuomo has joined the chorus, asking for a wage freeze for all state public employees. The immediate budget savings from any freeze would be relatively small - between $200 million and $400 million against a projected deficit in excess of $9 billion.

What is so perverse about this trend is just how vastly it misunderstands what went wrong in the first place. And what makes this go-around extraordinary is that national political leaders from both major parties have been pushing that same agenda.

Before we go down this path, a quick examination of New York's finances suggests a very different and far fairer way to fix our troubled budgets.

New York has three major kinds of taxes: the personal income tax, which hits nearly everyone's earnings; the sales and excise taxes, which hit everyone's expenditures; and the corporate and business profits tax.

Just like other states, Governor Cuomo is surveying insufficient revenues to cover expenditures. His major response has been to target public employees and their unions as if their pay, benefits, and especially pensions were chief causes of the problem.

One would think a genuinely democratic governor would begin work on the state budget by correcting unfairly low levels of taxation of billion dollar corporations, reducing regressive taxes, and increasing the progressivity of personal income taxes.

According to economy expert Richard D. Wolff, in 2010 personal income taxes raised $34.8 billion; sales and excise taxes raised $12.2 billion; and corporate and business profits taxes raised $6.6 billion. Not only do businesses pay a very small portion of the state's total tax take, but business taxes rose less than the other two kinds over the last decade. From 2000 to 2010, personal income taxes rose 50 percent, sales and excise taxes rose 24 percent, and corporate and business taxes rose the least, 20 percent.

If taxes on corporations and businesses were raised by 50 percent over what they yielded in 2000 - equaling what happened to New York's personal income taxes - New York State's budget would get much healthier. Such a business tax would generate more new revenue for New York than would be saved by the new governor's proposed wage freezes and other public employee cutbacks.

And why aren't we creating more brackets for the very highest income earners, who are most able to pay? The wealthy in New York pay far less taxes than the middle class, based on percentages. For example, why not 8 or 9 percent for those earning over $1 million annually and perhaps 15 percent for those earning over $2 million? Such additional brackets would impact only the top 1 or 2 percent of New Yorkers.

Cuomo has predictably chosen not to raise taxes on an infinitesimal few whose wealth insulates them from the worst effects of the economic crisis. These are the same New Yorkers who also benefited most when the "recovery spending" was distributed dating back to 2007.

Neither economic efficiency nor the people's welfare motivates the current attack on New York's public workers. So, please: enough already of the spin and insults about how public-sector workers are responsible for our budget woes. Government salaries and public-employee pensions are not killing state and local government budgets; politicians, corporate lobbyists, and the big donors who put these bureaucrats into public office are.

The wealth our working families create that has been moving from Main Street to Wall Street is why America is being torn apart at the seams. Let's put the fix and the blame squarely on the people who continue to rig the system in their favor- unscrupulous lawmakers and their unregulated big corporate donors who have become the patriots of profit at the expense of working families.

The opinions expressed here are the views of the author only and does not represent CSEA as an organization.